TMI Blog

2017 (12) TMI 662

course of search so as to doubt the transactions. It was noted that in the entire assessment order, the AO has not referred to any seized material or other material for the year under consideration having being found during the course of search in the case of assessee, leave alone the question of any incriminating material for the year under appeal - Decided in favour of assessee. - I.T.A. Nos.3171 to 3172/Del/2011, Cross Objection Nos. 274 to 275/Del/2011 And I.T.A. Nos.3171 to 3172/Del/2011 - Dated:- 7-12-2017 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Revenue : Sh. S.S. Rana, CIT(DR) For The Assessee : S h . Rajiv Saxena, Adv. & Sh. Shyam Sunder, Adv. ORDER PER H.S. SIDHU : JM The Revenue has filed these Appeals and Assessee has filed the Cross Objections against the respective Orders of the Ld. CIT(A)-I, New Delhi relevant to assessment years 2001-02 & 2002-03 respectively. Since the issues involved in these appeals and cross objections are common, hence, the appeals and cross objections were heard together and are being disposed of by this common order for the sake of brevity. 2. The grounds raised by the Revenue in ITA No. 3171/De .....

ainst this group was that they had taken a large number of accommodation entries in various group companies by paying cash to the various entry operators. After recording the satisfaction note, a notice u/s. 153C of the Act was issued on 29.9.2008 to the assessee requiring it to file the return of income in the prescribed form. In response thereto, the assessee company vide letter dated 07.10.2009 submitted that the previous return declaring income at ₹ 36,27,660/- filed on 28.11.2003 may kindly be deemed as the return of income submitted in response to notice u/s. 153C of the Act. Notice u/s. 143(2) dated 15.9.2009 was issued to the assesse fixing the case for 25.9.2009. In response to the statutory notices u/s. 142(1) & 143(2) of the Act and questionnaire, the A.R. of the assessee attended the proceedings from time to time and filed the details. Thereafter the case was assessed at an income of ₹ 2,28,13,060/- after making certain disallowances vide his order dated 24.12.2009 passed u/s. 153C/143(3) of the I.T. Act, 1961. 5. Against the aforesaid assessment order dated 24.12.2009, assessee preferred an appeal before the Ld. CIT(A), who vide impugned order dated 25. .....

taxmann.com 357 (Delhi) - Ganpati Fincap Services (P) Ltd. v CIT (2017) 82 taxmann.com 408 (Delhi). - CIT v Super Malls (P) Ltd.(2016) 76 taxmann.com (Delhi) - PCIT v Nau Nidhi Overseas Pvt. Ltd.(ITA no. 58/2017)(Delhi) - SSP Aviation Ltd v DCIT (20 taxmann.com 214) (Delhi) - KamleshbhaiDharamshibhai Patel v CIT (2013) 31 taxmann.com 50 (Gujrat) - Rajesh Sunderdas Vaswani v ACIT(2016) 76 taxmann.com 311 (Gujarat) - CIT v Classic Enterprises 35 taxmann.com 244 (Allahabad) 10. We have heard both the counsel and perused the relevant records available with us, especially the orders of the revenue authorities and the cases referred by the Ld. Counsel of the Assessee as well as by the Ld. CIT(DR). We find that the additions made by the AO are beyond the scope of section 153C of the Income Tax Act, 1961, because no incriminating material or evidence had been found during the course of search so as to doubt the transactions. It was noted that in the entire assessment order, the AO has not referred to any seized material or other material for the year under consideration having being found during the course of search in the case of assessee, leave alone the question of any incriminating mat .....

ents pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undisclosed income would be brought to tax . iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously an ITA Nos. 707, 709 and 713 of 2014 of assessment has to be made under this Section only on the basis of seized material. v. In absence of any incriminating material, the completed assessment can be reiterated a .....

ssessee, same was not proved to belong to assessee - Further, said documents did not relate to relevant assessment years and secondly, they could not be said to be incriminating - Whether since, both essential requirements for assumption of jurisdiction under section 153C were not met, issuance of notice was unjustified - Held, yes [In favour of assessee]. 11. Respectfully following the precedents as aforesaid, as aforesaid, we quash the assessment made u/s. 153(C)/143(3) of the I.T. Act, 1961 and decide the legal issue in favour of the Assessee and accordingly, allow the Cross Objection filed by the assessee. 12. Following the consistent view taken in assessment year 2001-02 in the Assessee s Cross Objection, as aforesaid, the another Cross Objection filed by the Assessee relating to assessment years 2002-03 also stand allowed. 13. As regards, both the Revenue s appeals are concerned, since we have already quashed the assessment while dealing with Assessee s Cross Objection, as aforesaid, hence, both the Revenue s Appeals have become infructuous and as such the same are dismissed. 14. In the result, both the Assessee s Cross Objections filed by the Assessee stand allowed and Reven .....